My Goodness, the controversy of collected a Deposit sometimes seems to be a deal-breaker when it comes down to choosing one Contractor vs. another. There are all kinds of good reasons to be careful with this and all kinds of other reasons Contractors should be aware of their importance.
Who Should You Not Give a Deposit to for a Project?
Contractors not registered with the Secretary of State or the BBB. Contractors who are not members of any kind of Professional Organization such as the PDCA (Painter Decorators Contractors of America) or do not have a Website or presence on the Internet. Be especially careful of Contractors who do not have Liability and most important Verifiable Workers Compensation Insurance Policies. They should have references to share with you. These types of “Owner Operator” types of Contractors are more like “2 guys and a Pick Up Truck” type of outfits. These types of Painting Contractors present an element of Risk to you to start with and giving them money upfront just adds to that. By the way, most consumer advocates who have an issue with deposits are really trying to protect you from these types of groups.
Why Do So Many Contractors Not Ask for Deposits?
Well, it is really simple. It’s the “Me too” Mentality of the Industry that drives it really. “I am afraid to ask for a deposit because so & so does not” or “What if I can’t sell a bid? I can’t risk that?” Does it provide me an edge over my competition? , How can I be Different not necessarily better? “It’s easy to sell and market it!” Really in the end folks, a Painting Contractor in Denver really needs to offer more to you than a “No Deposit Policy” What you say? How about History of performance, credentials, affiliation, customer service, good people, good leadership, quality products, a caring attitude, and an effective system to tie all that together. Providing deposits to Good, Caring Contractors should not be a concern or why you ultimately choose one over another. If you have been burned in the past, most contractors will work with you to make you comfortable either way.
What Is the Purpose of a Deposit?
Some will say to cash flow a Company, to buy Materials, to have addl. funds to shift elsewhere, etc. This is not what deposits are intended for by good companies who ask them from you. It is a small measure of commitment from Homeowner or Business Client to the Contractor that there is an agreement that will be honored. Organized Contractors have processes & people that have been paid and put in place to take care of you. This behind the scenes effort includes Systematic receipt of your Project, the arrangement of Materials, Creation of Files, placing you in a Scheduling program, Coordinating Colors, Assigning Crews & Crew Leaders, and Communicating and Following up with you.
Why Should a Contractor Even Consider Asking for a Deposit?
Many times in the Painting Industry, there is some measure of a waiting period as these processes are implemented and your crew ultimately shows up to do your Project. Some consumers will not honor the signature on a proposal and cancel an agreed Contract as they had nothing vested in it. Really it comes down to common business sense. Anything that is all good for one party and all bad for the other is just not a good or sensible way to run an enterprise. By the way, no Viable Contractor can make it on just a Deposit. They have to work hard and earn the rest of the Proposal in order to survive. They will want to make you happy to get the balance that is owed.
How Much Is Reasonable?
We only ask for a $100.00 for Exteriors due to Winter, Spring Bookings, Weather in general, and Volume in the Summer, but Up to 25% should be acceptable. Credit Cards are always refundable as are most deposits no matter how they are provided. Remodeling work deposits can vary depending on what is involved, the Volume and Type of Materials to be purchased in advance and the length of a Project until a Draw for Labor is appropriate. Sometimes 40- 50% is needed on Remodeling and Window Replacement Projects. A trustworthy, established Contractor will always have much to offer and the axis of their Marketing efforts will be more focused on great end results, great people, and a consistent quality product at a fair price.